Bitcoin is not widely used for dally payments yet, so volatile prices makes it difficult to use as a stable currency
This is the main reason why I don't think bitcoin will replace fiat and elimate banks. Even if our fiat currency is decreasing in value over the past years because of inflation, it will still continue to exist together with banks since using bitcoin on a daily basis is still very difficult.
Aside from its volatility, businesses also not want to accept it on their payment system since they avoid conflict with the authorities.
If banks start to control their users' money more and more, ask for every transfer, block suspicious, in their opinion, payments and accounts, then the transition to alternative options is not so far away, regardless of what the government thinks about this. If people start to be restricted, they will look for a way to bypass these obstacles, and bitcoin and other cryptocurrencies together with exchangers can become a good alternative in this case.